By Answerthink Marketing
April 23, 2021
As the demand for life science products and drugs has been steadily increasing across the globe, more and more pharmaceutical and biotech companies have shunned their vertically integrated business models. These companies have resorted to outsourcing much of their operations to contract development and manufacturing organizations (CDMOs) to meet the expectations from customers. However, the very nature of contract manufacturing can be complex and chaotic. Dealing with order volume shifts from customers, regulatory demands from the FDA, and thin margins are just a few issues CDMOs face daily. Life science companies are not just looking for a partner to manufacturer their products, but to handle all dimensions of their drug manufacturing. This often places contract manufacturers under pressure to have sufficient resources and tools in place, mainly an Enterprise Resource Planning (ERP) solution to handle all aspects of a busines especially in a heavily regulated life sciences space with strict process requirements.
Why ERP?
When it comes to contract manufacturing, an integrated ERP system can have several benefits. To start, it gives you a connected and intuitive system on a single platform to run and maintain a range of activities from manufacturing schedules, customer contracts, inventory and complex supply chains. Having a unified system across the organizations allows you to share information across departments seamlessly. Like many CDMOs, there are many different orders to fulfil (with specific requirements) from various life science clients. A quality ERP system can help you gain the adaptability needed to manage jobs, take full advantage of new revenue opportunities as well as having the opportunity to provide a better level of customer service to your clients.
However, not all ERP systems are created equal. The wrong choice can have consequences that run from minor inconveniences to process instability. This instability can lead to product recalls, lawsuits, and even death. Here are some key areas of functionality to look for in order to stay compliant and to support Good Manufacturing Practices (GMP).
Supports Process Manufacturing
Process manufacturing typically involves following a formula to mix the ingredients in specific proportions to create a bulk output. The ingredients and raw materials used in the manufacturing process are transformed through chemical reactions and cannot be reused. You will need to track raw materials, to include their potency, shelf life, batch or lot number and overall quality. These unique characteristics of process manufacturing make it difficult to manage but are often a requirement when dealing with any pharmaceutical and/or biotechnology clients. Ensure that your ERP application can achieve safe and quality drugs, and also that it supports the complete value chain from R&D to planning and inventory management, to procurement and production, quality and compliance and everything in between.
Supply Chain Management
Because of the breadth and depth of products and services offered by contract manufacturers, there is often a wide range of suppliers and partners involved. Managing these suppliers is a massive undertaking, requiring granular, real-time visibility into all aspects of the supply chain. Without a modern ERP system in place, CDMOs may struggle with maintaining excessive inventory while simultaneously underutilizing the volume of work that can be done. This can result in underperformance when it comes to delivering products. In addition, your pharmaceutical and biotech clients will come to expect an increase in transparency. With real-time data, you’ll be able to give your partners the peace of mind that you can anticipate and prevent issues and gain short- and long-term insights for optimal productivity. You’ll want an ERP solution that offers a window into each segment of the supply chain, automating inventory and capacity utilization and ensuring processes are running as quickly and efficiently as possible.
Materials Management Tools
Material management is an important process in supply chain management which is essential to transform inputs into outputs. It is the process of planning, organizing, staffing, directing, and controlling the flow of materials from their initial purchase to destination. Having material management tools in place help track your inventory, manage requests and dispatch materials for production. Biotech and pharmaceutical companies, like every business, value predictability above almost anything else. Knowing that shipments will consistently arrive on time and on budget makes countless other aspects of running a business much simpler. When a supply chain is working efficiently, it eliminates silos and ensures that people work together. Having an ERP solution that provides these manufacturing features can provide a comprehensive list of the materials you have available.
Enhanced Quality Control
One of the biggest complaints of life sciences companies that work with contract manufacturers is not having control over quality. As life science companies increasingly rely on contract service providers to access specialized technologies and accelerate time-to-market, the quality performance of CDMOs has become an important differentiator. Sustaining quality of pharmaceutical products/ drugs is a critical process. Contract manufacturers need to take advantage of ERP technology with built-in quality control metrics and practices to ensure they are producing products that meet the demands of their customers. These types of solutions offer peace of mind to customers as well as ensuring the end product will meet their standards while also complying with required mandates and compliance regulations.
Batch Tracking
Around seven percent of all medicines worldwide are counterfeit, which is a frightening number considering how many people depend on medications to live normal lives. This has led to more and more strict regulations by the FDA to track and trace solutions when manufacturing life science drugs and products. Regulatory agencies will require careful measuring, labeling, and marking that allow for rapid tracking and tracing if there is an issue post-production. Make sure your ERP features reports the details of who received shipments, their full contact information, lists of all the materials used in a batch, and who specifically performed the transactions.
Process Control and Compliance
From the security and compliance standpoint, it is critical for the companies to keep a log of the tracked and non-tracked items, the person-in-charge, or the affected accounts, in order to record and present a comprehensive view of transactions. Any changes must be recorded in the master data and therefore, maintain records of the added security compliance requirements, such as e-signatures, levels of approvals of changes, Batch Manufacturing Records, and more. To achieve this, ERPs should be compliant with CFR 21 Part 11, follow Good Manufacturing Practices, be able to print labels in standard formats and ensure all the compliance reporting requirements are met.
At the end of the day, Contract Development and Manufacturing Organizations (CDMOs) are at the center of today’s life sciences global supply chain. In order to compete and gain market share your organization should look at an ERP system specifically designed for Life Science organizations that address fundamental business and IT challenges.
Contact Answerthink® today to learn how our EzLifeScience, built on SAP’s advanced SAP HANA in-memory platform, can help CDMOs optimize their supply chain, comply with business and industry requirements, all while meeting Good Manufacturing Practices (GMP).
